Tax time for small businesses can be stressful, but being proactive and strategic can help
Effective tax planning is not just for complex and sophisticated arrangements. At Tier Accounting and Business Solutions, we provide simple and practical tax tips that can help you save money and reduce your tax burden. Our team of experienced tax accountants will work with you to identify opportunities to reduce your tax liability and increase your savings.
Our accounting and tax advisors have put together this tax planning guide to help you navigate the tax season.
UNDERSTAND HOW TAX PLANNING WORKS
It's important to have a proactive approach to taxation to ensure that you aren't caught out by any surprises come tax season. Many people make the mistake of leaving their tax planning until the last minute, but this can lead to oversights and missed opportunities. At Tier Accounting and Business Solutions, we're committed to providing our clients with the latest tax tips and strategies to help them manage their tax obligations effectively.
Preparing adequately will help you consider options available to you and ensuring they are actioned before June 30. This includes getting money into super, purchasing assets, incurring expenses, writing off assets (including debtors), setting up new entities, and documenting trust distributions.
GET YOUR PROFIT AND LOSS (P&L) STATEMENTS IN ORDER
If you understand your taxable income, you are well on your way to understanding your tax position. At a bare minimum, ensure you have a forecasted P&L in order. That way you have a clear and realistic idea of your income generation.
Each business is unique, so to best know when to forecast and how, speak to the team. This typically occurs in the months leading up to June 30.
GET PREPARED AND FORECAST
In addition forecasting your P&L and using your tax planning strategies to minimise tax, be sure to know what tax you need to pay on lodgement date. Knowing this will help to better prepare and create temporary cash flow opportunities, as needed. There are a variety of ways to achieve this.
We can show you how.
LOOK AT STOCK ON HAND
Strengthen your tax position by reviewing your stock on hand before June 30th. This allows your accountant to identify obsolete or overvalued inventory for a potential revaluation, ultimately lowering your taxable income and tax obligations.
UNDERSTAND YOUR TRADE DEBTORS
Before June 30th, solidify your financial picture by reviewing your trade debtors list. Focus on invoices over 60 days old to identify potential bad debts that can be written off for a tax deduction this year. Additionally, review debts owed by related entities to ensure compliance with Division 7A tax rules and avoid any surprises come year-end.
Review your equipmeNT
It's also important to review your fixed asset register and any disposed of or obsolete items that can be written off before June 30. We can work with you to update the register for any purchases and sales of assets during the year. This will ensure you are accurately reporting your fixed assets and taking advantage of any tax deductions available to you.
CHECK TO SEE IF YOUR CURRENT STRUCTURE WORKS
Make sure you take time to review your structure to ensure it's the best fit for your current business goals. This will help to protect assets and legally minimise tax. Remember, this is only possible to do in the lead up to June 30. Start with looking at your group structure and remuneration. We can work with you to identify the appropriate mix of salary and wages, trust distributions and dividends for key people within your business as well as shareholders.
FIND THE LEAKS
Take time to consider all the opportunities to legally minimise tax obligations, such as payroll tax and fringe benefits tax. We can help you find the leaks and take control.
GET IN TOUCH WITH A TAX PLANNING EXPERTS
If you're ready to take the next step in your tax planning journey, contact us today to schedule a consultation. There, you will be able to speak with one of our tax experts to have your small business tax questions answered.
Prepare to achieve your small business goals with a tax planning partner committed to helping you get there. We can't wait to get tax planning with you.